The adult market is influenced by lots of different trends and developments. One of the most important of them is the progressive convergence with the mainstream market. The opportunities and risks this development holds for the adult market, today and in the future, are the topic of our highly interesting interview with pjur group’s Marketing Manager, Michael Bart.
What will happen in the adult market in 2016?
Michael Bart: The biggest challenge will certainly be responding appropriately to the emerging opportunities, but also to the risks in the market. The way the adult market tackles both, the new, fantastic possibilities and the upcoming challenges, will determine if the year becomes a success?
Will the adult market make big strides in the direction of the mainstream world?
The Fifty Shades of Grey phenomenon seems to have run out of steam for the time being, but it has created great business opportunities for the adult market, and lots of positive PR to boot. So what remains as the hype abates is a more open-minded society that is less inhibited about things erotic, about sexuality in general, and about their own individual preferences.
Talking about sex and erotic products has become socially acceptable; these topics have reached the mainstream. That means we have taken the next step. The young and the older target audiences shed the old resentments against adult products. The younger generation has grown up with the internet and its boundless information – as a result, there are fewer taboos. The older generation is deemed the most important audience by many industries: They have time and money on their hands and are much more sexually active than previous generations were in their retirement age. After having worked, after having raised children, they want to enjoy their life, they want fun, they want to try new things!
“Each consumer group has expectations that need to be met!“
The appreciation of life quality is a trend that can be seen anywhere on the planet – and also among younger people. Everybody is looking for the right work life balance, and doing new, exciting things and being confident about your sexuality is part of that. But that also presents us with new challenges: Each of these groups has expectations that need to be met!
Which opportunities and challenges does this development result in?
By opening up to the mainstream (and the hype surrounding Fifty Shades of Grey), the adult market has experienced sudden growth in most countries. The market volume pretty much exploded. This is a great opportunity for established companies, but of course, it also creates new competition and it raises expectations.
“By opening up to the mainstream, the adult market has experienced sudden growth in most countries.“
The adult market offers great growth potential and low entry barriers, and in addition to that, the definition of what the customers expect is changing. As a result, the established trade members have to hold their own against new competitors – be they start-ups or companies and investors from outside the adult market who want a piece of that pie. This development is clearly reflected in the growing number of pjur’s business customers, and it spans most industrialised countries.
But of course, threshold countries are also developing, and the emergence or expansion of a middle class with money to spend presents us with new opportunities and new challenges as well. Today, more and more people want products of the best-possible quality, products that are perfectly safe and made of safe materials.
The new customer groups also have new expectations regarding the place where they shop for adult products, and these expectations are nothing like what the “traditional” customers of the adult industry settled for several years ago. Today’s customers expect different things, be they shopping in a walk-in store or visiting an online shop. They expect an appealing, friendly, bright atmosphere in which they find the coveted products quickly and easily and where advice and information is also easy at hand.
At the same time, they want to discover new things, they want to be surprised – be it through designs, images, colours, sales campaigns or special POS materials – something that tickles their senses. And they want to experience new facets of that experience every time they visit the store. So the shopping experience is definitely very important. Finding the perfect combination of entertaining the consumers and granting them quick and easy access to the information and products they want – that is one of big the challenges for the trade and producers, today and in the future.
”Today’s customers have new expectations, be they shopping in a walk-in store or visiting an online shop.“
At the same time, product quality – and consequently, guaranteed safety for body and health – are becoming a prerequisite for success and a differentiating feature when you compete with other producers. A market with such growth potential, fuelled by increasing interest from a large section of the population, does not only attract the attention of new market players, but also the attention of regulatory bodies.
As erotic products are becoming more widespread in mainstream channels, there will also be more and more strict tests and requirements in regard to product quality, health-related aspects, ingredients, and materials.
So the quality of your product is becoming more and more important if you want to succeed in the adult market?
I feel that in the upcoming years, the most effective way to stand your ground against fierce competition is scientific proof for the quality and safety of your products, presented in the form of test results, certificates, and registrations. Modern consumers don’t want to compromise when it’s about their physical wellbeing!
The aforementioned target groups look up information on ingredients and materials. Non-transparency or, worse yet, the omission of information will be noticed, and the producers and the trade members will feel the consequences. In such instances, the great range of the internet can quickly turn from boon to bane. Shitstorms and negative word of mouth have put more than one company through the wringer.
Quality is one of the most important criteria across all groups of daily life consumer goods, and that’s the direction adult products are heading as well. So banking on quality will become a big competitive advantage in the long run.
Michael Bart and Alexander Giebel (CEO pjur group) on eroFame 2015
To sum things up, the change in the adult market will continue. The industry is tapping into the potential of the mainstream market, the consumer behavior is changing, and so are the expectations concerning adult products. These factors are the catalyst for growth in the erotic market. New customers equal new potential, new competitors, and new risks. No matter which business model you pursue (online-only or hybrid), the big question is: Can you meet the new expectations, can you live up to the new requirements?
Every target audience has its own set of needs and wishes, and new rules and regulations will present additional challenges. Of course, the trade members are not the only ones faced with these challenges. The producers are very much in the same position. We at pjur are more than ready to take those challenges on, and want to prove ourselves a trustworthy partner to our clients by helping them achieve their goals.
Which trends will influence the market in 2016 and beyond?
The trends we’ve already addressed will dominate the adult market in the long run. Getting closer to the mainstream market is clearly a big development, and it will continue throughout the next years. However, that also presents the market players with a new set of challenges.
There will be new target audiences, new forms of customer behavior, and that in turn will be reflected in product design, shopping experience, and product quality. In our opinion, the quality will be particularly important, also as a means to hold your ground against the competition. All adult products are about intimacy, i.e. they are used on the most personal and most vulnerable parts of our bodies.
“Product safety and product quality are already becoming more and more important as can be seen from regulatory tests and certifications.”
In conjunction with the overall trend towards a healthier and more conscious lifestyle, this gives rise to new challenges for the producers and the trade members. No one will get away with selling products that contain harmful ingredients or materials anymore! Product safety and product quality are already becoming more and more important as can be seen from regulatory tests and certifications. Once you reach the mainstream market or at least mainstream channels of distribution (pharmacies, drug stores, etc.), the authorities automatically take an interest in you.
How will the existing channels of distribution change?
The importance of the internet as a channel of distribution, but also as a channel of communication and information, will continue to increase. Studies suggest that growth in the e-commerce segment is far from over. Content marketing is key here, as it helps offer some added value to the consumers, and because it motivates them to buy your products. And the growing popularity of the mobile internet creates new points of contact with the consumers – via smartphone, your products are available at any place and any time.
“Finding the right platforms and the right tools depends largely on your goals.”
Therefore, mobile marketing is another trend that will continue to gain momentum throughout 2016, and of course, the same goes for social media marketing. Facebook, Twitter, etc. are vital if you want to communicate with the consumers and if you want to give them additional incentive to buy your products. Finding the right platforms and the right tools depends largely on your goals. The key is to adapt to your customers and respond quickly to changes in the market.
Apart from the content-related possibilities of the internet as a channel of communication, marketing, and distribution, the technological developments also represent a factor that will make this market bigger and bigger. Broadband internet has been available to most people in the industrialised nations for years, nonetheless, it is easier to find things now than it was a few years ago (due, in part, to the way content is presented).
Also, the internet has long since become the easiest and most accessible way of looking for information, and also for buying products that people would feel uncomfortable buying in a brick-and-mortar store.
But the brick-and-mortar trade is also presented with new opportunities: new, inviting shop concepts with lots of glass, light, and interesting interior design will draw in the aforementioned consumer groups – be they young or old. As people open up about sexuality, these conceptual changes in store design go a long way to further lowering inhibition thresholds.
“With today’s technological standards and the rapid developments – both in terms of materials, but also consumer expectations – the trade needs to be very flexible.”
It will be easier for consumers to walk into an adult store or to actively look for adult products in mainstream stores (for instance, drugstores) or even ask about them. Visiting an adult store will become something of an entertainment trip, and if people find what they are looking for and are happy with the shopping experience, they will also tell their friends about it – which is the best advertisement a store could possibly have.
Boiling this down to a concrete bottom line is hard. The market is growing, and the sales environment is in a constant state of flux. With today’s technological standards and the rapid developments – both in terms of materials, but also consumer expectations – the trade needs to be very flexible. But at the same time, they mustn’t lose sight of their underlying, individual goals.
Taking new paths means taking on new challenges that can only be overcome with trustworthy partners. We at pjur feel that we are ready for these challenges, and we would be more than happy to be that partner to the trade.